The Bahamas: Economically Sound and Socially Strong

“Reporting to the People” in his annual New Year’s Address last Thursday, Prime Minister the Rt. Hon. H.A. Ingraham said the Government has delivered on its promises to create a more deeply democratic Bahamas; a more economically and socially just Bahamas; and a Bahamas in which fair-play, equity and compassion inform and serve as guideposts to Government policy and its implementation.

*”We are, today, a better-governed Bahamas, a healthier Bahamas, a better-educated Bahamas, and a safer Bahamas; we are today a more prosperous Bahamas, a Bahamas in which thousands of previously unemployed persons have found lucrative employment in a reinvigorated and expanded economy,”* said the Prime Minister.

The past nine and a half years have been years of unprecedented economic growth, according to Mr. Ingraham, evidenced by the levels of international and domestic investment in the Bahamian economy, most markedly in the tourism and financial services sectors, and in industries new to The Bahamas; namely, container transshipment and ship repair.

He pointed to strong economic indicators such as record levels of foreign reserves, recovery of tourism, strong construction, and doubling of government revenue. Particular reference was made to the “rescuing” of Grand Bahama Island’s economy through enlightened economic and investment policies — specifically in the areas of tourism, and in the manufacturing, industrial and construction sectors – and the stimulation of Family Island Development.

Notwithstanding the trilogy of adversities (the tragedy of the Straw Market fire on September 4; the horrific catastrophe of September 11 terrorist attacks in the United States of America; and, the destruction caused by the late season storm, Hurricane Michelle, in early November), the external sector nevertheless reflected the underlying strength of The Bahamas’ macroeconomic situation, according to Prime Minister Ingraham. The general weakening in economic performance resulted in a decline in external reserves, which never fell below $300 million, however, and ended the year at $311 million.

*”The economic outlook for the medium term depends heavily on the timing of the turnaround of the US economy, and, though less directly, on revival in other industrial economies. The economic fundamentals of The Bahamas are sound, reflecting the success of our economic policy objectives over the last nine years. And so, The Bahamas is well positioned to return to a sustainable growth path just as soon as economic recovery emerges in the United States. The predominant view is that this should occur in the second half of this year.”*

Referencing the rebound already witnessed in the tourism industry, the Prime Minister considered this a tremendous achievement when the extent of the expected impact of the terrorist attacks on tourism is considered – a fall-off of 30% according to the World Travel and Tourism Council, as compared to a reduction in travel by some 9% during the Gulf War. *” Management, protection and conservation will become very important watchwords in future economic developments in The Bahamas and elsewhere.”* said Mr. Ingraham.

New Financial Services Framework

In his address to the nation, the Prime Minister further reported that recent challenges to the nation’s financial services sector were met, successfully, resulting in a comprehensive revision and enhancement of the financial services legislation and regulations. He explained that *”New regulatory bodies created to meet the new and evolving standards for international financial services are manned by experienced financial services experts, sourced locally and internationally, and assisted by consultants identified with the assistance of the International Monetary Fund. Indeed, during the first half of 2001 we experienced an increase in employment in the financial services sector as financial institutions, licenced to operate in and from The Bahamas, acted to bring their operations into full compliance with the new Bahamian legislative requirements.”*

Also pointed out was that the response to the various initiatives of international financial agencies was influenced by that self-interest. {*I}”Clearly, The Bahamas’ self-interest is best served when we are recognised and acknowledged as a premier international financial services centre where top quality individuals and institutions are comfortable to invest and to conduct their business.”*

-The new Employment Act, Minimum Wages Act and the Health and Safety in the Workplace Act

-Constitutional Reform And Elimination of Sanctioned Discrimination

Giving his opinion on the “state of the nation”, Prime Minister Ingraham said *”I am very pleased to note that notwithstanding a weakened global economy, in spite of the severity of three serious shocks to our economy within less than two months, and, in spite of the need to come to terms with the changing environment in the international financial services sector, we continue to be economically sound and socially strong. Most importantly, as a people, we are better-prepared and better-positioned to meet the challenges which the coming year promises to bring.”*